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Incentives Outweigh
The Euro-Zone Rules

Updated Dec. 21, 2010 12:01 a.m. ET

The euro-zone experiment provides a spectacular example of how incentives ride roughshod over rules every time ("Germany Vows Defense of Euro," page one, Dec. 11).

The structure of 16 sovereign fiscal units sharing one currency created an irresistible incentive to "beggar thy neighbor" by running huge deficits. This danger was obvious, so the Maastricht Treaty enacted rules limiting debt and deficits. Predictably, these have been circumvented, resulting in a series of solvency crises. When will we ever learn?